Lawry Trevor-Deutsch, the CFO of Stella Luna Gelato, a family-owned and operated café in Old Ottawa South, says the price of coffee from the business’s wholesaler has increased by almost 20 per cent since last March.
Trevor-Deutsch told Capital Current the café has decided not to pass on the increasing cost to customers.
“I think it would be unfair unless we’re really losing money for us to pass that on, so we’ve been absorbing it all,” said Trevor-Deutsch.
The price of roasted or ground coffee in Canada has increased by 29 per cent since January 2025, according to a Capital Current analysis of Statistics Canada data that tracks the price of goods and services.
Last month, the Consumer Price Index showed the cost of coffee was 26 per cent higher than all other items. A year prior, coffee was only three per cent higher than all other items.
“We had a minor two or three per cent [price increase] last summer, and we’ve been holding since,” said Trevor-Deutsch.
Coffee sales account for 15 to 20 per cent of their business, with gelato 60 per cent and food, pastries and alcohol representing the other 20 per cent. Even though their main product isn’t coffee, margins are still tight, said Trevor-Deutsch.
“Gelato costs have gone up considerably,” said Trevor-Deutsch. “Dairy’s gone up, fruit has gone up. Everything we do is natural, so we can’t put powders and fillers to make up the difference in margins.”
He says as long as prices are stable, Stella Luna Gelato will maintain current prices. But if input costs rise again, they’ll have to pass some of it on to customers.
“We’re lucky because we have a good reputation. We’re pretty well established, but it’s pretty thin these days.”
Prices increasing
Companies such as Tim Hortons, Keurig and Folgers have recently raised their prices in Canada. The price increase from Tim Hortons came after three years of stable prices for coffee at outlets.
Graeme Auld says this year’s surges in coffee prices are the result of overlapping pressures on the global supply chain.
Recent U.S. tariffs on Canada and key coffee-producing countries such as Brazil are pushing prices higher, the expert in comparative and global environmental politics and policy, international political economy, climate change and natural resource governance at Carleton University, said.
Tariffs are disrupting long-standing trade relationships and creating uncertainty for buyers and roasters. Because much of Canada’s coffee passes through or is priced in U.S. markets, those added costs are flowing directly into Canadian wholesale and retail prices.
“The trade, the use of tariffs and the changing global trade regime have certainly impacted coffee in a way that’s new,” Auld said.
Another layer of instability is that coffee grows in a “narrow band” often referred to as the “bean belt,” meaning it can only grow in areas near the equator, Auld said.
When crops fail, new coffee plants take about five years to mature. Climate change has increased crop failures, especially in countries such as Brazil and Vietnam, where recent weather events have hindered production.
This ripples up the value chain quickly, leading to the price spikes Canadian consumers are seeing.
Auld said climate change will likely bring further uncertainty, as regions face heat, pests and declining crop output.
However, he predicts that prices won’t stay permanently high, since higher costs create a greater incentive to invest in more production.
Impact on consumers
Oscar Lavitt makes several types of coffee at home and has at least three different coffee routines depending on the day.
“Coffee is a very versatile drink,” said the third-year student at the University of Ottawa. “Everybody’s got a different way of consuming coffee and that’s a part of what makes it special.”
“It’s also just what keeps you up in the morning.”
Being an enthusiast of all kinds of coffee, Lavitt says he often notices quality differences, which is why he opts for specific brands.
However, if coffee prices continue to rise, he says he might change where he gets his beans. Lavitt says he has already noticed prices going up at local coffee shops.
“Am I potentially avoiding buying a café coffee when otherwise I might have? Yes,” Lavitt said.
“I am changing my consumer decisions because of the prices going up. And it might reduce my convenience.”
